Grace Boland (Dublin Fingal West, Fine Gael)
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157. To ask the Minister for Finance if the beauty industry will be included in the reduced VAT rate of 9%; and if he will make a statement on the matter. [5326/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy should note that the EU VAT Directive, with which Irish VAT Law must comply, contains provisions under Annex III which allows for a reduced rate of VAT on specific goods and services. While hairdressing is included in Annex III to allow for a reduced rate, beauty salons are not listed. Therefore it is not possible to apply the 9% rate to beauty salons.

In spite of the fact that beauty salons do not qualify for a reduced rate under Annex III, you should be aware that due to a historic VAT derogation they are subject to the other reduced rate of 13.5%.

This arises from the fact that many of the goods and services to which Ireland applies a reduced rate of VAT, including services related to care of the human body, have their basis under the aforementioned EU derogation that provides that as Ireland applied a reduced rate to these items on 1 January 1991, we are entitled to continue applying that reduced rate to those items. However, this is conditional on the rate being no less than 12%. These are known as ‘parked’ items, and as the services provided by beauticians are part of these parked items, it is not possible for Ireland to apply the rate of 9% to them.